| Agri GDP growth twice as effective in reducing poverty-Why then plan allocations to Agri sector very low at 2.4%? - Compiled by K.Ramasubba Reddy |
| Cross-country analyses indicate that gross domestic product (GDP) growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originating outside the sector . Improvements in agricultural productivity are critical for poverty reduction, as shown, for example, in the experiences of Brazil, China, and India . |
The effect of 1 percent increase in crop yields on poverty reduction in South Asia is 0.48% reduction in the number of poor. Growth and Productivity in Agriculture and Agribusiness 2010-WB IEG
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“… the global experience of growth and poverty reduction
shows that GDP growth originating in agriculture is at least twice as effective in reducing poverty as GDP growth originatingoutside agriculture.” Agri Sector- XI Plan Mid term Appraisal
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Growth in GDP at factor cost 1999-2000 prices
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Eleventh Plan Agriculture and Total economy
Allied Sectors
2007-08 4.7 9.2
2008-09 1.6 6.7
2009-10 R E 0.2 7.4
Triennium 2009-10
over Triennium 2004-05 3.4 8.6
Eleventh Plan
Average (2007-10) 2.2 7.7 |
The Eleventh Plan acknowledged that slowdown in agriculture growth after mid 1990s was due to multiple factors including the lack of a breakthrough in technology of major crops ; low replacement rate of seeds/varieties; slow
growth or stagnation in area under irrigation and fertiliser use, decline in power supply to agriculture, and slowdown in diversification. It was assumed that the large gap between attainable level of productivity achieved in frontline demonstration plots and actual productivity at farm level offers a ready option to raise productivity and production by pushing
use of quality seed, fertiliser, and water (irrigation). The plan emphasised balanced use of fertiliser, application of micronutrients, increase in seed replacement rate, and speedydissemination of improved and potential
technology.
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Technology Generation and Delivery
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Past experience in India, as well as worldwide, shows that technology is one of the prime movers of agricultural productivity and growth. India currently spends about 0.6 per cent of agri-GDP on agri-R&D. It is widely believed by experts that India needs to raise this to at least 1 per cent of agri-GDP, which is an average of the developing countries, if it has
to raise productivity in a sustained manner.
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Central Plan outlay for Agriculture and allied sectors
(Rs. in crore)
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Total outlay Agri sector share
X Plan (2002-07) Rs.9,45,328.00 Rs.26,108.00 (2.4 per cent)
XI Plan (2007-2012) Rs. 21,56,571.00 Rs.50,924.00 (2.4 per cent) |
The allocation to agriculture and allied sectors in Centre’s Plan has been substantially increased from Rs. 21,068 crore in the Tenth Plan to Rs. 50,924 crore in the Eleventh Plan.
However, as percentage of the Total Central Plan the share of agriculture and allied sector’s continues to be around 2.4 per cent, which increased to around 3 per cent in 2007-08. |
The total projected Gross Budgetary Support (GBS), at current prices, for the Eleventh Five Year Plan for the Ministry of
Agriculture is Rs. 61,979 crore which includes Rs. 41,337 crore for Department of Agriculture and Cooperation, Rs. 8,054 crore for Department of Animal Husbandry, Dairying & Fisheries and Rs. 12,588 crore for Department of Agricultural Research & Education. |
The utilisation of Eleventh Plan outlay by the
Ministry of Agriculture, so far, i.e. in first 4 years (including provision made in Budget in 2010-11) is likely to be around 61 per cent, leaving a large balance amount for the last year of Eleventh Plan. |
In the case of Department of Animal Husbandry, Dairying and Fisheries the utilisation in the first four years is in the order
47 per cent and for Department of Agricultural Research and Education at 55 per cent. Thus large shortfall in utilisation of expenditure is expected in the case of Department of Animal
Husbandry, Dairying and Fisheries and the Department of Agricultural Research and Education. |
During Eleventh Plan the Rashtriya Krishi Vikas Yojana (RKVY) has an allocation of Rs. 25000 crore which is in addition to the
above mentioned allocation of Rs. 61,979 crore for the Ministry of Agriculture. The releases/ outlay under RKVY during the first four years amount to Rs.14,586 crore which is 58 per cent
of the Eleventh Plan outlay. A substantial increase will be required in 2011-12 to achieve the Eleventh Plan allocation of Rs. 25,000
crore. |
| Agricultural Credit |
| Financial inclusion is vital for growth to be inclusive. The Union Finance Minister had on 18 June 2004 announced doubling of flow of credit to agriculture sector within a period of
three years. |
The actual disbursement by banks exceeded the targets. For the years 2007-08, a target was fixed for Rs. 2,25,000 crore
disbursement by banks, while adding 5 million farmers to their portfolio. As against this, all banks (including cooperative banks and Regional Rural Banks) disbursed Rs. 2,54,657
crore forming 113 per cent of the target. During 2007-08, 7.5 million new farmers were financed by commercial banks and RRBs. |
For the year 2008-09 the target was kept at the level of Rs. 2,80,000 crore against which the amount disbursed is placed at Rs. 2,92,437 crore The flow of credit has been facilitated to a large extent by the Kisan Credit Cards (KCC) scheme introduced in 1998-99. Till November 2009, a total of 878.3 lakh KCCs have been issued by the banking system with the amount sanctioned aggregating to Rs. 3,81,070 crore. |
| Excerpts from XI Plan Midterm Appraisal |
| Krsr/271010 |
